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THAILAND Chinese rubber processors due for sites survey

After a meeting of Thai Prime Minister Prayut Chan o-cha and a group of leading rubber enterprises in China, Commerce Minister Chatchai Sarikulya said that Thailand was prompted to facilitate investment from Chinese rubber firms, as they will transfer technology and should help encourage a rubber price hike as demand spurts for domestic manufacturing.

About 10 rubber processors from Shan Dong province and representatives from the China Council for the Promotion of International Trade are scheduled to visit Indonesia, Myanmar and Thailand from 19-25 November 2014.

This group of about 50 representatives from both companies and government agencies will reach Thailand on 23 November and stay to 25 November to seek opportunities to invest in the South and Northeast, the country's major rubber tree growing areas.

Government agencies will help facilitate investment from China as this is a great opportunity for Thailand to solve the falling price problem and help farmers secure a sustainable price in the long run, as well as to promote rubber industry growth. China is the largest importer of rubber from Thailand. China can produce about 500,000 tonnes of rubber a year, but normally it has to import up to four million tonnes.

China has reduced its orders for rubber from Thailand during the past two years, while it has expanded its contract farming in Cambodia to encourage people there to raise rubber trees.

Thailand needs to solve the problem, or else its best foreign customer will continue to reduce purchases.

Supporting the establishment of rubber plants here should guarantee that China will continue to use Thai rubber to supply its plants and export to China and third countries.

Apipong Khunakornbodintr, counsellor for investment promotion at the Thai Embassy in Beijing, said the Board of Investment of Thailand will lay plans to facilitate Chinese investment in the processed rubber industry, which could take the form of 100-per-cent ownership or a joint venture with local partners.

The Shan Dong companies are some of China's leading rubber processors. They do their own research and development, trade on the futures market and offer a variety of rubber products.

If the Chinese firms agree to invest here, they will help promote technology transfers and create jobs for local people.

China has already set up two large-scale rubber tyre plants in Rayong. One is scheduled to start full operations next May. It should help absorb rubber supply in the domestic market and help drive prices up.